The 2020 annual report comparing banking charges and fees for all nine banking institutions in Namibia is out, and consumers can now compare which product and institution suits their budget.
During the year, there were numerous complaints that commercial banks were sucking consumers dry with unreasonably high fees and charges.
In some cases, individuals and businesses had to change banks amid the banks competing for the shrinking customer base as a result of Covid-19.
Annually, the Bank of Namibia releases a report titled ‘Banking Fees and Charges Report’, giving consumers insights on all products offered by local banking institutions.
It is now up to consumers to compare whether they were charged correctly, and also choose products that fit within their means.
For this year, the report, as at 30 September, presents a comparison of banking fees and charges for 36 banking products across nine banking institutions in Namibia.
The 36 products include all options provided for at automatic teller machines, cellphone banking, point of sale transactions and electronic fund transfers.
It also provides insight on products that have no charges and the minimum transactions businesses and individuals can undertake without being charged.
The commercial banks enlisted in the report are Atlantico Bank Namibia, Bank BIC, Bank Windhoek, First National Bank, Letshego Bank Namibia, Nedbank Namibia, Standard Bank Namibia, Trustco Bank and NamPost.
In the report, the central bank says its policy position regarding bank fees and charges is to ensure that the fees or charges payable by a user are in the public interest, promote competition, efficiency and cost-effectiveness in service delivery and comply with the standards the bank has set.
The central bank further said its report focuses on 10 banking activities that appear to be most frequently used by the average consumer when conducting banking, as shown in the information collected from the Namibian banking industry.
Responding to complaints that banking institutions were increasing fees, Bank of Namibia governor Johannes !Gawaxab last week said although the prevailing economic environment is tough, commercial banks were only doing what is normal in the sector and the central bank cannot stop them.
The governor said the above this week at the announcement of the decision of the monetary policy committee, while answering questions on how the interest rates have contributed to growth in the economy this year.
It is common knowledge that although interest rates have decreased, and people and businesses are paying less on loans, commercial banks have also moved to take away that benefit by increasing transaction and facilitation fees.
Left unchecked, increasing banking charges can hinder financial access, as individuals would shun commercial banks because they cannot afford the fees, and financial exclusion would continue widening.
While !Gawaxab agrees that the fees have increased, he said the central bank has instructed commercial banks to be transparent about their fees.
For some commercial banks, there are deliberate efforts to discourage customers from using cash, and those that do are punished with higher fees and charges.
Up to the end of September this year, data from the central bank shows that all commercial banks in total earned N$2,5 billion from fees, averaging to N$280 million a month. Most of this comes from transaction-based banking-related fees.
Individuals and businesses at the end of September had a N$113 billion deposit balance with Namibian commercial banks – with N$30 billion in current accounts, the bank’s biggest source of fees.
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